Which of the following approaches to determine bad debts expense best achieves the matching concept? Select one: a. direct write off b. percentage of ending accounts receivable c. percentage of sales d. percentage of average accounts receivable

Which of the following approaches to determine bad debts expense best achieves the matching concept? Select one: a. direct write off b. percentage of ending accounts receivable c. percentage of sales d. percentage of average accounts receivable

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 10MC: Which of the following estimation methods considers the amount of time past due when computing bad...

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Question

Which of the following approaches to determine bad debts expense best achieves the matching concept?

Select one:

a. direct write off

b. percentage of ending accounts receivable

c. percentage of sales

d. percentage of average accounts receivable

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Similar questions

Which of the following estimation methods considers the amount of time past due when computing bad debt? A. balance sheet method B. direct write-off method C. income statement method D. balance sheet aging of receivables method
Which method of recording bad debt loss is consistent with accrual accounting? A. Allowance method B. direct write off method C. Percent of sales method D. Percent of accounts receivable method
Which of the following methods may not be appropiate for estimating bad debt expense? a. percentage of net credit sales b. percentage of outstanding accounts receivable c. aging of accounts receivable d. percentage of sales
A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and their length of time past due is the: A. Direct write-off method.B. Aging of accounts receivable method.C. Percentage of sales method.D. Aging of investments method.E. Percent of accounts receivable method.
Which of the following methods may not be appropiate for estimating bad debt expense? a. Percentage of net credit sales b. Percentage of outstanding accounts receivables c. Aging of accounts receivables d. Percentage of sales
Using the following key, identify the effects of the following transactions or conditions on the various financial statement elements: I = increases; D = decreases; NE = no effect. A.credit sale b. Collection of a portion of accounts receivable c. Estimate of bad debts d. Write-off of a specific uncollectible account
Which of the following methods of estimating bad debts expense considers the length of time past due for the outstanding accounts: a. Percentage of sales method b. Percent of accounts receivable method c. Aging of investments method d. Aging of accounts receivable method
How do the percent-of-receivables and aging-of-receivables methods compute bad debts expense?
The __________ method is based on the relationship of credit sales and matches current bad debt expense against current credit sales. a.direct write-off b.percent of outstanding accounts receivable c.percentage of credit sales d.aging of accounts receivable
Indicate how the percentage-of-receivables method, based on an aging schedule, accomplishes the objectives of the allowance method of accounting for bad debts. What other methods, besides an aging analysis, can be used for estimating uncollectible accounts?
Which of the following best describes the objective of estimating bad debt expense with the percentage of credit sales method? a.To estimate the amount of bad debt expense based on an aging of accounts receivable. b.To estimate bad debt expense based on a percentage of credit sales made during the period. c.To determine the amount of uncollectible accounts during a given period. d.To facilitate the use of the direct write-off method.
Which of the following statements is true regarding the two allowance procedures used to estimate bad debts? Oa. The percentage of net credit sales method takes into account the existing balance in the Allowance for Doubtful Accounts account. Ob. The aging of accounts receivable method takes into account the existing balance in the Allowance for Doubtful Accounis account. Oc, The direct write-off method does a better job of matching revenues and expenses. Od. The direct write-off method takes into account the existing balance in the Allowance for Doubtful Accounts account.